USD/JPY may be set to extend its recent declines following the formation of a Bearish Engulfing candlestick pattern near the range-top at 102.77. This may afford new short opportunities with an ultimate target offered by the range-bottom at 101.20. Interim buying support is likely to emerge at the psychologically-significant 102.00 handle.

USD/JPY: Bearish Engulfing Pattern Puts Pressure on USD/JPY

Daily Chart - Created Using FXCM Marketscope 2.0

An examination of the four hour chart reveals an absence of key reversal candlestick patterns, which casts doubt on the potential for an intraday recovery. Sellers would likely look to re-emerge at former support near 102.25, while further declines would likely see buyers return at 101.50.

USD/JPY: Close Below 102.25 Opens 101.50

Four Hour Chart - Created Using FXCM Marketscope 2.0

By David de Ferranti, Market Analyst, DailyFX

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